Morgan Stanley’s stock rallies after big revenue beat, boosted by strength in fixed income underwriting

Shares of Morgan Stanley
MS,
-0.89%
climbed 1.3% in premarket trading Tuesday, after the bank and broker missed profit expectations because of special one-time charges, but beat revenue forecasts by a wide margin, boosted by strength in its investment banking business. Net income dropped 32.2% to $1.52 billion, or 85 cents a share, to miss the FactSet consensus of $1.07. The results included charges of 28 cents a share related to an FDIC special assessment and a legal charge. Revenue grew 1.2% to $12.9 billion, to beat the FactSet consensus of $11.93 billion. Investment banking revenue increased 5%, as fixed income underwriting revenue jumped 25% while advisory and equity underwriting revenue were flat. Elsewhere, equity, fixed income and wealth management revenue were “essentially unchanged.” The stock has climbed 13.9% over the past three months through Friday, while the Financial Select Sector SPDR ETF
XLF,
-0.19%
has advanced 12% and the S&P 500
SPX,
+0.08%
has gained 9.4%.